Gold goes up after Fed rate hike announcement

choose forex - gold and gold socks

choose forex - gold and gold socksFriday was third day in a row in which gold stock made profits. Compared to Tuesday, now it’s on a twenty dollars higher place. It was expected, especially after the Federal Reserve statement. Their commitment to keep the federal funds rate target at an ultra low level, pushed the U.S dollar down, together with most of the short – term yields.

The main enemy of gold stocks, throughout the past is higher short term rates and there are a few reasons for that. Rising the short rate terms is a benefit for the dollar, as it takes fewer of them to buy the same amount of gold. Another reason is that gold bars throw no yields.

After the latest statement, gold stocks are back on track and feeling safe. At the moment, gold is facing resistance at 1.205.80 $ and 1.204.70 $. Yesterday morning, it was up at 1.204.00$ so, analysts believe that further gains are not something you should bet on.choose forex - gold stock market

Gina Sanchez of Chantico Global has her own opinion: “Gold looks a lot better after the U.S Central Bank statement, but don’t expect it to last. I believe it will change quickly. The stand that the Fed has taken about raising the rates, or not raising them, is only a short term decision. They must raise them at some point just for credibility purposes. A rate hike will follow, and the losing streak of could will continue.